The predicament of 900,000 unsold BS-III vehicles

This is a discussion on The predicament of 900,000 unsold BS-III vehicles within The Indian Car Scene, part of the BHP India category; Originally Posted by 90BHP
Interesting decision from the government. Anyway to know apart from the form 22 mentioned above whether ...

Interesting decision from the government. Anyway to know apart from the form 22 mentioned above whether the existing car is BS3 or BS4? I own a VW Vento TSi from December 2015. I can't seem to find anything in the brochures or my documents

Your Vento TSI is BS4. As mentioned before, mandatory registration of only BS4 passenger cars started from April 2010 (NCR + 13 cities) and later extended to 50 additional cities by around April 2015/16. For most of the passenger vehicle models (personal use), there wasn't as an economic case for the manufacturer to maintain two different inventories.

As a thumb rule, almost every passenger car/UVs, manufactured/launched after late 2010, with either a petrol engine or a diesel engine with common rail tech were all BS4.

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Originally Posted by dailydriver

Please correct me if i am wrong, but i think the presence of a Catalytic Converter and OBD2 port are perhaps two very distinguishable (at least for Bhpians) features of BS4 vehicles.

Cat-cons were present in BS3 vehicles also. While it is true that BS4 mandated having OBD2 ports, whereby govt agencies can plug in and scan for emission related faults in the car, many cars had OBD2 ports prior to BS4. If I am not mistaken the pre-2010 VW/Skodas (BS3), Punto/Linea BS3 had OBD2 ports too.

Few queries regarding changes in government policies that may lead to phasing out/banning of older two wheelers and passenger cars (BS III and older) have come up in this thread as well as Discounts Thread (List of discounts on BS-III Motorbikes & Scooters in your city). All such qualms shall be put to rest IMHO. First the axe will be for Medium and Heavy Commercial Vehicles, more than 15 years old, which contribute for more than 34% of the air pollution as indicated in the study conducted by AT Kearney.

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Originally Posted by BLACKBLADE

No, such a drastic decision will not be taken by the government. Not any time in the near future. I would say you need not worry about this at least for ten years or so, in my humble opinion.

Even if such a decision is taken, first the target will be vehicles which have crossed their life time i.e. vehicles that are more than 15 years old. The phasing out will start with BS II vehicles first. That too commercial vehicles, in particular diesels, will face the axe first. Then it may be extended to private vehicles in a phased manner.

Found a January 2017 news article on the upcoming government's policy of scrapping older vehicles.

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The Ministry of Road Transport plans to retire only medium and heavy commercial vehicles (MHCVs) — and not passenger cars — that are more than 15 years old under a proposed vehicle scrapping policy submitted to a Committee of Secretaries for approval.

“In respect of LMVs (light motor vehicles), it is estimated that about 40 lakh cars are plying on the road that are more than 15 years old. These vehicles are estimated to contribute about 3 per cent of vehicular pollution. Since the overall contribution of cars to emissions is significantly less, hence they are not being considered under this programme,” says the Ministry.

According to the Motor Vehicles Act, a light motor vehicle or LMV is defined as a transport vehicle with an unladen weight that does not exceed 7,500 kg, a definition that covers the entire range of passenger cars and SUVs (sports utility vehicles) and MUVs (multi utility vehicles) that are currently available. This includes the Toyota Innova (weight of 1870 kg for the heavier auto version), Mitsubishi Pajero (1,935 kg), Ford Endeavour (2,357 kg) and Mercedes Benz GL Class (2,535 kg). All vehicles weighing more than 7.5 tonnes are MHCVs.

The ministry cites a study by AT Kearney which shows that there are 11.2 lakh MHCVs which are more than 15 years old and contribute to 34 per cent of the pollution. In all, MHCVs accounted for 2.5 percent of country’s total fleet but contributed over 60 per cent of the air pollution, it says. Vehicle emissions contribute to rise in levels of toxic carbon monoxide, hydrocarbons, nitrogen oxides and particulate matter. Since it would be very difficult to impose a mandatory retirement of vehicles, the ministry argues, it plans to provide some respite and encourage retirement in this segment by proposing a voluntary vehicle modernization programme followed by a regulation on the life of vehicles.

For the first two years, vehicle owners would be given incentives in the form of scrap value, direct transfers capped at 4-5 per cent of the cost of basic model as well as cash discounts of 4-5 percent from the original equipment manufacturers. In effect, these would amount to a benefit of about 15 per cent in lieu of surrendering an old 16-tonne truck, says the illustration in the proposal. The previously proposed incentive by way of 50 per cent exemption in excise duty has been removed as the Finance Ministry has said that it would not be practical in view of the country’s shift towards a GST regime.

However, the 15-per cent incentive would be limited to the first two years to help in “smooth progression to regulatory regime of capping the life of the vehicles by the transport industry”. Then on, vehicle owners would be given sufficient time to look for viable replacements through a phased capping of the life of MHCVs to 18 years as on April 1, 2018; 16 years as on April 1, 2019 and finally at 15 years from April 1, 2020. Section 59 of The Motor Vehicles Act empowers the government to specify the life of a motor vehicle reckoned from the date of its manufacture. At present, an owner pays a one-time tax for lifetime but needs to get the fitness certificate renewed after 15 years to continue running it.

The government had told the Supreme Court this July that a new policy to combat pollution including scrapping of old vehicles and a scheme to replace about 28 million automobiles registered before March 31, 2005 was underway and would be implemented soon.

The policy proposes three incentives for the vehicles scrapped -half the road tax and excise duty at the time of purchase of the new vehicle, fair value for the scrap, and discounts from automobile manufacturers. These incentives are likely to cut cost of a new vehicle for the buyer by 15% on an average.

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The draft policy was for voluntary retirement for all four wheeler vehicles which were bought before April 2006.

However, the policy which has been given a go ahead by the CoS is only limited to commercial vehicles such as trucks and buses which are older than 15 years.

Point of interest to us is that LMVs and two wheelers are not considered in this policy.

Last edited by BLACKBLADE : 31st March 2017 at 17:49.
Reason: Added picture and made changes in formatting.

Remember in the LMV category there are many retirees with maybe 2000-3000km pa of running. They essentially use it to potter around their colony and maybe occasionally venture outside. So even if they are running BS-0 they are not contributing significntly to the pollution.

For a layman who is not aware how to distinguish between a BS-III and BS-IV vehicle - how can one make sure post 31-Mar, whether the vehicle being sold to them is not a BS-III vehicle?

Is there a kind of a certificate or document attached to each vehicle (VIN/Engine/Chassis) to show if this vehicle is a BS-III or a BS-IV?

Yup there is.

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Originally Posted by avinash_clt

If it is a new vehicle, you can ask for 'FORM 22: INITIAL CERTIFICATE OF COMPLIANCE WITH POLLUTION STANDARDS, SAFETY STANDARDS OF COMPONENTS AND ROAD-WORTHINESS'. This is issued by the manufacturer and requires them to explicitly mention emission certification.

Only exception I can think about are the CBU bikes above 800cc which do not require homologation (maybe for CBU cars also that don't require homologation). I am not aware whether these bikes are actually tested for BS3/BS4 regulations or not, I presume not. Whether that also excludes the manufacturer from providing Form 22 - again need more information.

We were not provided with the Form 22 while taking delivery of a Ducati 959 Panigale last year. The bike is EU4 spec though. RTO registration was some time after vehicle delivery (Bangalore dealer , KL RTO) and we also had to wait for obtaining the specific registration number. However the RTO accepted the registration without Form 22.

So according to the current information as of today morning, almost all two wheeler dealers had zero BS3 inventory. Everything sold of yesterday itself. I can say that for the whole of Uttarakhand for sure.
Most of these were scooters which had a 12.5K + 1.5K of dealer margin thrown in. It was literally a Kumbh Mela yesterday and everything was finished by 1 AM.

This interview with Mr Rajiv Bajaj, MD, Bajaj Auto, in the Economic Times of today gives an insight into some of the causative factors that led to the piling up of the 825,000 BS III motor vehicles in all categories. His views present an account of an insider and are quite logical. He also expresses his feelings about the Society of Indian Automobile Manufacturers (SIAM) for their handling of the Bajaj Qute (RE 60) matter, which is still not street legal as on date (this part of the interview has been edited in this excerpt on the link. But the newspaper hard copy gives more details).
It is perplexing to know that some manufacturers had jacked up production of their products, though well in the know that the BS IV emission standards will be effective from 01/04/2017. The SIAM's only hope was the apex court where they hoped that some relief will be accorded. But this bombed.

Some more facts that perplex us are that the automobile manufacturers who were in the apex court to pray for relaxation of the BS IV norm implementation, were joined by the government in tow to defend their contention. On the other hand, the same parties advocate a ban on the plying of 15 year and older motor vehicles, saying that these pollute the maximum and deteriorate the air quality with abnormally high SOx, NOx,oxides of carbon and SPM emissions. And these very same parties file affidavits in the apex court seeking relaxation of the stringent BS IV norms to sell their BS III wares post April 1, 2017, merely as they had stocked up enough of these with a total worth of about Rs 15,000 crores. Their contention through the affidavits was that the pollution levels will only minimally be affected by such a sale of 825,000 BS III motor vehicles.

Hence, the double games these parties play is evident, when it comes to ban on older 15 year plus motor vehicles, including scrapping them and their own prayer now in the apex court saying that the air quality will only be minimally affected if the 825,000, BS III compliant motor vehicles are sold, is quite amusing.

And coming back to the apex court judgement, the judiciary had seen through these games and had pronounced the strongly worded verdict. Now we get news that with the discounts galore, nearly all of them in the class of 825,000 are likely to be sold through the dealerships before the deadline. Thus we have the apex court judgement, the ban on sale of non BS IV motor vehicles after April 1, 2017 and the reality wherein we observe that nearly all of them are to likely be sold. And all of them sold in the process can be registered after 1/04/2017, provided it has invoice of 31/03/2017 or before and valid insurance of 31/03/2017 or earlier.

He opines that most OEMs expected some sort of concession which was not obviously granted by the honorable Supreme Court. Also he is of the view that almost 90% of the two-wheelers inventory, that was available with the dealers, would have got sold out!

In a fire sale like no other, as much as 90% of the over 650,000 Bharat Stage-III compliant two-wheelers have been sold in a mere 36 hours after India’s apex court ruled that auto makers cannot sell such vehicles after 1 April.

“I believe 90% of BS-III stock has been sold,” said Nikunj Sanghi, a dealer for Hero MotoCorp Ltd and also a past president of the Federation of Automobile Dealers Associations.

“Our shops are closed. In Jaipur, we had to ask for police protection,” he added.

The Society of Indian Automobile Manufacturers (SIAM) has filed a petition in the Supreme Court asking the apex court to review its order banning the sales of BS-III compliant vehicles in India after March 31, 2017.

To its defence, the automotive manufacturers' body has claimed that the court had not considered some facts, which influenced its previous order. The SIAM points to the Office Memorandum from the Ministry of Road Transport & Highways through which, the government had directed manufacturers to stop production of BS-III vehicles before 1st April 2017. SIAM claims that this Office Memorandum was originally dated 3rd March, 2017, but the apex court erroneously read it to be dated 3rd March, 2015. This led the court to conclude that the manufacturers were given ample time before the deadline, which was not true according to the automotive body.

SIAM claims that the manufacturers had received the Memorandum three weeks before the March 31 deadline. Moreover, the government had earlier assured that unsold BS-III vehicles that were manufactured before April 1, will be allowed to be sold even after the deadline, similar to what has been the arrangement when BS-II and BS-III emission norms were implemented. However, with the Supreme Court order, the existing stock was rendered useless, forcing dealerships to offer huge discounts in the last few days, in order to clear their inventory and minimise losses.

Various reports suggest that automotive manufacturers are still sitting on a cumulative unsold stock of 1.4 lakh BS-III vehicles, which equate to around Rs. 5,600 crore in valuation.

3rd March 2017 read as 3rd March 2015!! Seriously !! . This seems to be a serious lapse from judiciary. If this is true then I do support the manufacturers atleast to give them some breathing time to sell offs their old goodies. But only they can be solely blamed for continuing with the production of BS-III vehicles inspite of knowing about the deadlines.

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Originally Posted by dZired

SIAM files review petition in SC for BS-III sales ban

The Society of Indian Automobile Manufacturers (SIAM) has filed a petition in the Supreme Court asking the apex court to review its order banning the sales of BS-III compliant vehicles in India after March 31, 2017.

To its defence, the automotive manufacturers' body has claimed that the court had not considered some facts, which influenced its previous order. The SIAM points to the Office Memorandum from the Ministry of Road Transport & Highways through which, the government had directed manufacturers to stop production of BS-III vehicles before 1st April 2017. SIAM claims that this Office Memorandum was originally dated 3rd March, 2017, but the apex court erroneously read it to be dated 3rd March, 2015. This led the court to conclude that the manufacturers were given ample time before the deadline, which was not true according to the automotive body.

SIAM claims that the manufacturers had received the Memorandum three weeks before the March 31 deadline. Moreover, the government had earlier assured that unsold BS-III vehicles that were manufactured before April 1, will be allowed to be sold even after the deadline, similar to what has been the arrangement when BS-II and BS-III emission norms were implemented. However, with the Supreme Court order, the existing stock was rendered useless, forcing dealerships to offer huge discounts in the last few days, in order to clear their inventory and minimise losses.

Various reports suggest that automotive manufacturers are still sitting on a cumulative unsold stock of 1.4 lakh BS-III vehicles, which equate to around Rs. 5,600 crore in valuation.